Global Rates
ECB deposit
2.00%
Unchanged
BOE base rate
3.75%
Unchanged
BoJ policy rate
0.75%
Unchanged
RBA cash rate
4.35%
+25bp May
CBR key rate
14.50%
-50bp Apr.
WTI Oil
~$99
Below $100
WTI breaks below the symbolic $100 mark ($99 this morning), amplifying the disinflationary dynamic that reduces the urgency to hike for the ECB and BoJ. The US FOMC minutes (hawkish, 8-4) have no direct impact on global central banks, but signal a potentially stronger dollar — which is disinflationary for import-dependent economies (eurozone, Japan). The core thesis from the May 21 screening remains intact and is strengthening: ECB and BoJ at 84% for a June hike still appear overestimated. On the BOE, one important data point: the April Monetary Policy Report confirmed a UK CPI projection of 3.3% in Q2 before rising in H2 — hawkish pressure on the MPC is growing. No major central bank meeting this week.
Today's Market Moves
BoJ: +25bp June
84%→84%0pp
Stable — SELL thesis reinforced by WTI $99
ECB: +25bp June
84%→84%0pp
Stable — WTI $99 reduces May HICP pressure
BOE: hike 2026
68%→68%0pp
Stable — hawkish pressure confirmed by MPC report
CBR: cut June
85%→85%0pp
Stable — cutting cycle intact
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | BoJ: +25bp June | Jun 2026 | 84% | 60% | -24pp | SELL YES | $133K | 7/10 |
| 2 | ECB: +25bp June | Jun 2026 | 84% | 63% | -21pp | SELL YES | $347K | 7/10 |
| 3 | ECB: +25bp July | Jul 2026 | 37% | 20% | -17pp | SELL YES | $N/A | 5/10 |
| 4 | BOE: hike 2026 | Dec 2026 | 68% | 78% | +10pp | BUY YES | $31K | 6/10 |
| 5 | BOE: +25bp June | Jun 2026 | 3% | 12% | +9pp | BUY YES | $226K | 5/10 |
| 6 | CBR: cut June | Jun 2026 | 85% | 77% | -8pp | NEUTRAL | $53K | 4/10 |
| 7 | RBA: hike June | Jun 2026 | 10% | 7% | -3pp | NEUTRAL | $29K | 3/10 |
| 8 | BOE: hold July | Jul 2026 | 77% | 65% | -12pp | SELL YES | $N/A | 4/10 |
Top 5 Opportunities
1
BoJ: +25bp June — NO
↓ SELL YES-24pp
Market price
84%
Fair value
60%
Gap: -24pp
Thesis unchanged and reinforced. WTI at $99 reduces imported inflationary pressure for Japan, diminishing the urgency to defend the yen through rate hikes. The April BoJ vote was 6-3 for the status quo. Japan FY2026 GDP revised to 0.5% slows internal FOMC dynamics. US tariffs on Japanese cars weigh on Q3-Q4 exports. Potentially stronger dollar (hawkish FOMC minutes) = yen stabilized without a rate hike.
▵ Bull case
- 3 MPC dissenters in April: strong internal pressure
- Weak yen = imported inflation if WTI rebounds
- Spring Shunto: 5%+ wage increases support demand
- Japan core CPI 2.8% above target
▿ Bear case
- 6-3 vote against in April: majority for status quo
- Japan FY2026 GDP revised to 0.5% — slowdown
- WTI $99: yen pressure eased
- Strong dollar (hawkish FOMC minutes) = yen stabilized
- US auto tariffs: export shock Q3-Q4
2
ECB: +25bp June — NO
↓ SELL YES-21pp
Market price
84%
Fair value
63%
Gap: -21pp
WTI at $99 is the key catalyst: with energy in sharp decline, the May HICP flash (May 30, before the June 5 ECB meeting) will be mechanically lower than in April. If the HICP flash shows deceleration toward 2.5-2.8%, the ECB will have grounds to wait. The ECB already held in April despite 3% inflation — the precedent is established. 84% for a hike with this data seems excessive.
▵ Bull case
- Bloomberg survey: consensus for two hikes in 2026
- Eurozone HICP at 3% remains above target
- German fiscal stimulus: solid domestic demand
- ECB SPF Q2: inflation projected above target through 2027
▿ Bear case
- ECB held in April despite 3% inflation
- WTI $99: May HICP expected lower
- EUR/USD: stable euro = imported disinflation
- Potentially stronger dollar → less pressure on euro
3
BOE: hike 2026 — YES
↑ BUY YES+10pp
Market price
68%
Fair value
78%
Gap: +10pp
The April MPC report confirms: UK CPI projected at 3.3% in Q2 before rising in H2 2026 due to energy prices and tariffs. The OECD projects 4% for the full year — highest G7 level after the US. With one hawkish dissenter already active (8-1 vote), the probability of a hike by December is underpriced at 68%. The market is underpricing the UK inflationary trajectory.
▵ Bull case
- UK CPI 3.3% in Q2, higher H2 projection
- OECD: 4% for 2026, 2nd G7 after US
- 1 hawkish dissenter in April: internal momentum
- Services inflation >5%: sticky component
▿ Bear case
- 8-1 vote: very comfortable majority for status quo
- Fragile UK growth, stagflation risk
- WTI $99: energy disinflation partially visible in UK too
- Low liquidity ($31K)
4
ECB: +25bp July — NO
↓ SELL YES-17pp
Market price
37%
Fair value
20%
Gap: -17pp
If the ECB hikes in June (Bloomberg scenario), July would be a near-certain pause — the ECB doesn't string two consecutive hikes. If the ECB pauses in June (our base scenario), July becomes unlikely too. In both cases, 37% for a July hike is overestimated. This trade is secondary: lower yield and conditional on the June outcome.
▵ Bull case
- Persistent inflation scenario: ECB forced to chain hikes
- July HICP data surprises to the upside
▿ Bear case
- ECB historically cautious: pause after each hike
- Bloomberg: June hike + September (not July)
- WTI $99: favorable July HICP base effect
5
BOE: +25bp June — YES
↑ BUY YES+9pp
Market price
3%
Fair value
12%
Gap: +9pp
3% for a BOE surprise hike in June is very low. If UK May CPI (published June 18, day of meeting) shows acceleration toward 4%, the MPC will have the data to justify an immediate hike. The precedent exists: the BOE surprised with a 50bp hike in June 2023 when inflation was stubborn. Asymmetric position: low cost (3¢), high potential gain if hawkish surprise.
▵ Bull case
- UK May CPI could accelerate toward 4% (OECD projection)
- 2023 precedent: BOE surprise 50bp hike
- 1 hawkish dissenter already present
- CPI published same day as meeting: data-dependent decision
▿ Bear case
- 8-1 vote: need 4 more members in 6 weeks
- WTI $99: partial disinflation visible
- BOE priority: financial stability, not just inflation